I've been looking on with interest at a bunch of SaaS stocks for a while now (Constellation, Intuit, Atlassian, Toast, Salesforce) as they fell on the 'AI will kill every SaaS company' narrative starting to gain momentum.
I think it's safe to say that that whole 'SaaS extinction event' narrative has basically gone from 'scary idea' to 'accepted wisdom' by the market at this point given the magnitude of the moves today after Anthropic dropped their latest tool and everyone freaked out. I'm not saying that's right, the markets frequently get it wrong, just commenting on the price moves.
I'm trying to figure out what to do here.
Option A would be begin to buy these SaaS companies that have large customer bases, recurring revenue and a long history. Doing that sort of requires a belief that they'll integrate AI into their products 'on the run' while fending of the 'pure' AI companies and their abilities. They might fall more in the next months / years so doing this also would require a fair bit of patience and ability to tolerate that pain.
Option B would be to not buy at all, continue to watch as the market sorts out the winners and losers. This would be based on a belief that AI is actually going to cause most of these companies to either lose a bunch of users or that it will compress their margins so far that they'll become unattractive investments but that it's impossible to tell which at this point.
Option C would be to wait on the 'AI bubble' popping because if that happens, all tech will be indiscriminately sold down (whether it's AI or SaaS) for a while. Doing that means a belief that the AI capabilities of the AI companies are overstated and that the SaaS companies will be fine in the long term as they integrate the helpful AI tools and keep their users. I have no idea on whether that's true or not (and no one else really seems to either, but the moves today seem to suggest there's more in the 'AI will change everything' camp than the 'AI is a bubble one').